Description:
Subdomains are an extension of a main domain.
For example, Yahoo! can be accessed at www.yahoo.com. Yahoo! Sports can be accessed at sports.yahoo.com. In this case, sports is the subdomain.
Most of the time people only create records (www, mail, ftp, etc.). This is technically not a subdomain. A subdomain is when you delegate a part / section of your domain to different name servers.
"example.com" is a subdomain of "com".
"com" uses uses one set of name severs for delegation (the com top level doamin name servers) and "example.com" uses different name servers (DNS Made Easy for instance).
Here is what happens when you notify your registrar to use DNS Made Easy name server:
Inside the "com" zone new NS records will be added / changed for "example.com" that will point the domain to the DNS Made Easy name servers. That is how domains are delegated to authoritative name servers (all people have to do though is notify their registrar).
So if you wanted a subdomain for "example.com" (such as "us.example.com" or "europe.example.com") then you would create NS records to delegate that part of your domain to different name servers making a subdomain. Then those name server would create a record (A or CNAME records) called "www" so the FQDN (fully qualified domain name) would be "www.us.example.com".
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